Wednesday, May 28, 2008

In February, in Farm Raised Salmon Cases, 42 Cal.4th 1077 (2008), the Supreme Court held that the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §§ 301 et seq.) did not preempt plaintiffs' UCL and CLRA claims. Those claims rested on the argument that the defendants improperly failed to disclose that they used artificial coloring to turn the flesh of their salmon pink before selling it. (For more on that decision, see these two blogposts.)

On remand, the Court of Appeal (Second Appellate District, Division Three) held in an unpublished opinion that the primary jurisdiction doctrine did not apply and that the trial court improperly sustained defendants' demurrer without leave to amend. Farm Raised Salmon Cases, No. B182901a (May 16, 2008). Respecting the primary jurisdiction doctrine, the court explained:

The primary jurisdiction doctrine does not apply ... if the issues involved are of a type ordinarily resolved by the courts in the first instance, an administrative agency has no particular expertise with regard to the issues, and the issues do not require the application of complex regulations. (Cundiff v. GTE California Inc., supra, 101 Cal.App.4th at p. 1413.) In those circumstances, concerns about the uniform application of regulatory laws ordinarily are not implicated.

We conclude that the sustaining of the demurrer based on the primary jurisdiction doctrine was an abuse of discretion. ....

The alleged violations of the [Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301 et seq.)] and parallel provisions of the Sherman Law [(Health & Saf. Code, § 109875 et seq.)] concern “false and misleading” labeling of salmon offered for sale and the failure to state on the labeling that the salmon contains artificial coloring. Federal and state regulations expressly and unequivocally require the disclosure of canthaxanthin and astaxanthin as artificial coloring agents. (21 C.F.R. §§ 73.35(d)(3), 73.75(d)(4); Health & Saf. Code, § 110100, subd. (a).) There are no complex regulations at issue in this regard, but only straightforward requirements. The determination whether the salmon offered for sale by defendants contained those chemicals and whether the labeling failed to disclose that fact requires neither the application of complex regulations nor any particular administrative expertise. Rather, those questions are the sorts of factual questions that ordinarily are committed to the courts. Moreover, the FDCA and the regulations under that act provide no administrative procedure (and certainly no “ ‘pervasive and self contained system of administrative procedure’ [citation] to deal with the precise questions involved” as in Farmers, supra, 2 Cal.4th at page 396) to determine whether a food is misbranded, but only provide for the FDA to enforce the act by filing an action in court. (21 U.S.C. § 337(a).) Although the Sherman Law provides for an administrative proceeding to determine whether a food is misbranded (Health & Saf. Code, § 111855), we conclude that any advantage that the DHS may have in resolving the issues presented here is not particularly strong. For these reasons, we conclude that the primary jurisdiction doctrine does not apply.

Slip op. at 8-10. The Court went on to hold that the complaint adequately alleged a CLRA violation:

The CLRA prohibits, among other things, “Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have.” (Civ. Code, § 1770, subd. (a)(5).) Liberally construing this provision as the Legislature intended (id., § 1760), we conclude that by allegedly displaying and offering for sale farm-raised salmon that was artificially colored to resemble wild salmon, without disclosing the artificial coloring, defendants were “representing” that the salmon had the same origin and characteristics as wild salmon. We therefore conclude that the complaint alleges “representing” within the meaning of Civil Code section 1770, subdivision (a)(5) and that the sustaining of the demurrer to the count for violation of the CLRA was error. (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 834 [stating, “the CLRA proscribes a concealment of characteristics or quality ‘contrary to that represented’ ”].) In light of our conclusion, we need not decide whether the complaint adequately alleges other prohibited acts or practices under the CLRA.

Id. at 11. Many thanks to the blog reader who emailed with news of this opinion.